IC Companys: Our Ambition IC Companys: Our Ambition IC Companys: Our Ambition IC Companys: Our Ambition Investor Presentation September 2011
IC Companys: Our AmbitionIC Companys: Our AmbitionIC Companys: Our AmbitionIC Companys: Our AmbitionInvestor PresentationSeptember 2011
22
Contents
Introduction
Our ambition
So far so good
33
– One of the Top 5 Largest Sports and Fashion Companies in the North
““““11 Scandinavian sports and fashion11 Scandinavian sports and fashion11 Scandinavian sports and fashion11 Scandinavian sports and fashionbrandsbrandsbrandsbrands””””
““““SourcingSourcingSourcingSourcing offices in offices in offices in offices in
China, Hong Kong, Bangladesh, Vietnam, India, and RomaniaChina, Hong Kong, Bangladesh, Vietnam, India, and RomaniaChina, Hong Kong, Bangladesh, Vietnam, India, and RomaniaChina, Hong Kong, Bangladesh, Vietnam, India, and Romania””””
““““DistributionDistributionDistributionDistribution throughthroughthroughthrough
own retail, outlets, eown retail, outlets, eown retail, outlets, eown retail, outlets, e----commerce, franchise and wholesalecommerce, franchise and wholesalecommerce, franchise and wholesalecommerce, franchise and wholesale””””
““““RevenueRevenueRevenueRevenue of of of of DKKDKKDKKDKK 3.9b3.9b3.9b3.9b**** and 2,344and 2,344and 2,344and 2,344 employeesemployeesemployeesemployees””””
““““More than 450 stores and 11,000 wholesale selling pointsMore than 450 stores and 11,000 wholesale selling pointsMore than 450 stores and 11,000 wholesale selling pointsMore than 450 stores and 11,000 wholesale selling points
around the worldaround the worldaround the worldaround the world””””*) FY 2010/11
44
Nov-10New structure
Aug-08New management
Sep-09Building growth foundation
The World has Changed and So Has IC Companys– Stronger, Transparent, Flexible and Efficient
210 210 210 210 JulJulJulJul----08080808
40 40 40 40 DecDecDecDec----08080808
138138138138SepSepSepSep----11111111
Sep-08Financial crisis
Feb-09Crisis management
Jul-11New crisis?
282282282282JanJanJanJan----10101010
Aug-11New sourcing
55
Contents
Introduction
Our ambition
So far so good
66
Creating Big Future Growth by Focussing on 5 Strategic Goals
““““BuildBuildBuildBuild strong fashion brandsstrong fashion brandsstrong fashion brandsstrong fashion brands””””
““““Have aHave aHave aHave a focused market approachfocused market approachfocused market approachfocused market approach””””
““““IncreaseIncreaseIncreaseIncrease control of distributioncontrol of distributioncontrol of distributioncontrol of distribution””””
““““Optimise ourOptimise ourOptimise ourOptimise our processes processes processes processes andandandand value chainvalue chainvalue chainvalue chain””””
““““PractisePractisePractisePractise world class leadershipworld class leadershipworld class leadershipworld class leadership””””
77
November 2010 Our Corporate Strategy Was Defined Setting a Clear Direction for How We as a Corporation Deliver Value
ICC STRATEGY ICC STRATEGY ICC STRATEGY ICC STRATEGY
11 BRANDS11 BRANDS11 BRANDS11 BRANDS
� Brand strategy
ITITITIT SOURCINGSOURCINGSOURCINGSOURCING LOGISTICS LOGISTICS LOGISTICS LOGISTICS HR HR HR HR FINANCE FINANCE FINANCE FINANCE
SERVICE PLATFORMS SERVICE PLATFORMS SERVICE PLATFORMS SERVICE PLATFORMS
� Functional strategy, SLA
Aligned across the Group as of 2011Aligned across the Group as of 2011Aligned across the Group as of 2011Aligned across the Group as of 2011
PORTFOLIO STRATEGY ALIGNMENT
PORTFOLIO STRATEGYPORTFOLIO STRATEGYPORTFOLIO STRATEGYPORTFOLIO STRATEGY [IN PROGRESS]
� Rooted in the strategy and based on
our business principles
DISTRIBUTIONPRODUCT
DEVELOPMENT
KNOWLEDGE CENTREKNOWLEDGE CENTREKNOWLEDGE CENTREKNOWLEDGE CENTRE
� Vision and mission, principles and
frame, tools, follow-up
BRAND BUILDING AND MARKETING
88
Clear Awareness in Brands – Different Levels from Strategy to Operational Excellence
Operational Excellence
Operational Excellence
Operational Excellence
Operational Excellence 7
Key D
isciplines
7 Key D
isciplines
7 Key D
isciplines
7 Key D
isciplines
StrategyStrategyStrategyStrategy
BrandBrandBrandBrand
WholesaleWholesaleWholesaleWholesale
Retail/franchiseRetail/franchiseRetail/franchiseRetail/franchise
EEEE----commercecommercecommercecommerce
Distant marketsDistant marketsDistant marketsDistant markets
SourcingSourcingSourcingSourcing
Collection Collection Collection Collection developmentdevelopmentdevelopmentdevelopment
Brand building Brand building Brand building Brand building and marketingand marketingand marketingand marketing
99
Exception
shopping
experience
High store
awareness &
loyalty
Excellent
operations
Excellent
cost mgmt.
High
expansion
speed
X
Z
Z
X
ZY
X
Z
EBIT
Turnover
per m2
Retail
Implementation of Score Boards Measuring Both Financial and Non-financial Indicators – on Each of the 7 Key Disciplines
EXAMPLE: RETAIL
Overall qualitative score
Qualitative score on 5 key retaillevers
Quantitativemeasures oncurrent performance
Overall retail score as key lever on brand scoreboardKEY LEVER SCORESKEY LEVER SCORESKEY LEVER SCORESKEY LEVER SCORES
KPIsKPIsKPIsKPIs
BRAND BRAND BRAND BRAND SCOREBOARDSCOREBOARDSCOREBOARDSCOREBOARD
Exception
shopping
experience
High store
awareness &
loyalty
Excellent
operations
Excellent
cost mgmt.
High
expansion
speed
X
Z
Z
X
ZY
X
Z
EBIT
Turnover
per m2
Retail
KEY LEVER KEY LEVER KEY LEVER KEY LEVER
SCORES SCORES SCORES SCORES
KPIsKPIsKPIsKPIs
1010
All Brands Have Been Through a Brand Strategy Process to ConfirmTop Down Assessment
CURRENT CURRENT CURRENT CURRENT PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE
�Brand challenges
�Effort prioritization
BRAND STRATEGY PROCESS
�Brand position
BRANDBRANDBRANDBRANDDNA DNA DNA DNA
�Clear direction
�Ambitious financial target
BRANDBRANDBRANDBRANDAMBITION AMBITION AMBITION AMBITION
�Channel focus
�Clear priorities in all markets
CHANNEL CHANNEL CHANNEL CHANNEL STRATEGY STRATEGY STRATEGY STRATEGY
�Product, pricing, collection development and sourcing
�Brand DNA & growth plan alignment
PRODUCT PRODUCT PRODUCT PRODUCT STRATEGIC STRATEGIC STRATEGIC STRATEGIC FOCUSFOCUSFOCUSFOCUS
�Marketing direction
�Brand DNA & growth plan alignment
MARKETING MARKETING MARKETING MARKETING STRATEGIC STRATEGIC STRATEGIC STRATEGIC FOCUS FOCUS FOCUS FOCUS
�Clear financial targets
5555----YEAR YEAR YEAR YEAR GROWTH GROWTH GROWTH GROWTH PLAN PLAN PLAN PLAN
�Focused market effort
COUNTRY COUNTRY COUNTRY COUNTRY FOCUS FOCUS FOCUS FOCUS
Where Where Where Where
to goto goto goto go
How to get How to get How to get How to get
theretheretherethere
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Contents
Introduction
Our ambition
So far so good
1212
EBITEBITEBITEBIT, , , , DKKmDKKmDKKmDKKm and EBIT margin, %and EBIT margin, %and EBIT margin, %and EBIT margin, %
323 340 349
162
283321
360-410
10.7% 10.1%9.3%
4.5%
8.1% 8.2%8.8-9.5%
2005/06 2007/08 2009/10 2011/12
Revenue, Revenue, Revenue, Revenue, DKKbDKKbDKKbDKKb and gross margin, %and gross margin, %and gross margin, %and gross margin, %
3.0
3.4
3.73.6
3.5
3.9
4.1-4.3
58.5%59.1%
60.4%
59.6%
60.8%
59.1%
2005/06 2007/08 2009/10 2011/12
Top Priority in 2011/12: Grow Profit Ahead of Sales
� Expected revenue growth in the range
4-10% in 2011/12
� Gross margin under pressure from
external factors and market conditions
� Expected EBIT growth in the range
12-28% in 2011/12
� Expected EBIT margin of 8.8-9.5%
� One-offs 2010/11 of DKK 28m
AvgAvgAvgAvg. . . . +7%+7%+7%+7%
AvgAvgAvgAvg....+20%+20%+20%+20%
1313
0
50
100
150
200
250
300
06/07 07/08 08/09 09/10 10/11
Capitalising on the Brand Strength of By Malene Birger
Revenue, Revenue, Revenue, Revenue, ttmttmttmttm
1414
(40%)
(20%)
0%
20%
40%
07/08 08/09 09/10 10/11
The Turnaround of InWear
InWear received ”Guldknappen” for the second timesecond timesecond timesecond time – last time was 20 years ago
Lene Borggaard has breathed new lifenew lifenew lifenew life into an established brandestablished brandestablished brandestablished brand while at the same time being
fateful to its original coreoriginal coreoriginal coreoriginal core
Revenue growth, Revenue growth, Revenue growth, Revenue growth, QoQQoQQoQQoQ
1515
Our Main Markets Have All Been Affected by the Crisis– We Expect to Take Market Share
Development in Denmark, YoYRevenue growth, IC Companys
Growth in retail trade, clothing
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
Development in Sweden, YoY
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
Revenue growth, IC Companys
Growth in retail trade, clothing
Development in Norway, YoY
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
(15%)
(5%)
5%
15%
25%
35%
Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
Revenue growth, IC Companys
Growth in retail trade, clothing
Growth in main marketsmain marketsmain marketsmain marketsbeyond growth in retail
trade� IC Companys is gaining market
share
GrowthGrowthGrowthGrowth in revenue and
profitability to be to be to be to be
maintainedmaintainedmaintainedmaintained FY 2011/12� Economic indicators have
worsened considerably
� Increased uncertainty regarding
revenue
1616
Guidance FY 2011/12
Growth Growth Growth Growth in revenue and profitability to be maintained to be maintained to be maintained to be maintained FY 2011/12� Economic indicators have worsened considerably
� Increased uncertainty regarding revenue
RevenueRevenueRevenueRevenue in the range of DKK 4.1 4.1 4.1 4.1 –––– 4.34.34.34.3b� Expansion of controlled distribution
− Retail and franchise
− Focus on franchise
� Same-store growth
EBITEBITEBITEBIT in the range of DKK 360 360 360 360 –––– 410410410410m� Still improved transparency, adaptability and resource prioritising from new
structure
Investments Investments Investments Investments in the range of DKK 90 90 90 90 –––– 120120120120m
1717
SPLIT ON REVENUE INCREASE
How to Realize Top-line Growth under Difficult Market Conditions
RevenueRevenueRevenueRevenue in the range of
DKK 4.1 4.1 4.1 4.1 –––– 4.34.34.34.3b� Previously DKK 4.3 – 4.4b
Low risk on expansion of
controlled distributioncontrolled distributioncontrolled distributioncontrolled distribution� Retail and franchise
� Focus on franchise
Elements in organic organic organic organic
growthgrowthgrowthgrowth� Traditional wholesale
� E-commerce
� Same-store growth
Organic growth 35-45%
Franchise expansion25-30%
Retail expansion
30-35%
Full year effect
New stores
Full yeareffect
New stores
DKK
175-375m
1818